I write about the Internet technologies and upstarts that are disrupting advertising and media faster than ever. I'm living this disruption, so I might as well write about it, too. I spent nine years as chief of BusinessWeek's Silicon Valley bureau writing about the leading edge of technology and business, and I continue to do so for a variety of publications. Follow my posts here by clicking the "+ Follow" link under my name. You can also find me at my personal Web site RobHof.com, follow me on Twitter (robhof), Circle me on Google+, subscribe to me on Facebook, and email me (robert.hof@gmail.com).

What Startup Buyout Frenzy Says About Social Media's Future

Despite the resounding thud of Facebook‘s disappointing initial public offering of stock, social media still looks like a huge opportunity for marketers–and for the rapidly expanding ecosystem of companies looking to help them understand how to operate in the new medium. So social media enablers from Buddy Media to Vitrue to Wildfire Interactive have been snapped up for big money recently by seemingly unrelated companies such as Salesforce.com, Oracle, and Google.

What’s up with that? Essentially, it’s a recognition that social media can’t be successful in marketing unless it’s connected to a brand’s other marketing efforts, from traditional and online advertising to public relations. Much of the infamous dissatisfaction of brands such as General Motors with Facebook advertising stems from their relegating social media to a little experiment rather than figuring out how it’s unique and how it best meshes with other marketing channels.

Ragovin: If you’re not doing social media today, it’s almost a fireable offense.

Q: Despite the consolidation, there’s still a lot of companies offering social media marketing tools. How should marketers choose among the 200-plus vendors?

Kalehoff: The convergence of paid, owned, and earned media is happening now. When David Fischer of Facebook said a few months ago that you’d reach only 17% of fans with posts and you need to buy ads to reach more of them, the signal was clear. … You need integration with back-end systems like CRM (thus the consolidation).

La Rotonda: Companies that can offer a more consolidated solution are going to be more beneficial than individual solutions for page creation and customer management.

Ragovin: If you have all of these different players, you can’t bring all the marketing together. We’re particularly excited being part of Radian6 (acquired by Salesforce.com).

Kalehoff: You can look at search as an analogy. In the beginning, Google had a lot of partners on top of search. But in time, you saw a few winners play out. Eventually the winners in social will start to rise.

La Rotonda: But no one can do everything well. One request for proposal we got recently seemed to ask for every feature box to be checked. We came back saying we can do a few things we can do really well, but no one out there can do it all.

Q: What impact will consolidation have on innovation in this space? Opportunities for new, small players, or a lockdown of code so that there’s no room for them?

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